Directional influence and the Obama question

A few days ago I read an interesting post by Auren Hoffman on homophily – the phenomenon of being affected by one's friends and close associates. Intuitively this makes sense – we all make decisions influenced by those around us.

But there’s an important distinction to make between the existence of influence and its direction. What I mean is this: you might be influenced in the purchase of a new digital camera by a friend who has bought one recently. But are you more or less likely to buy the same model as your friend? You might be inclined not to buy that model, even though it might be the best model for you, precisely because your friend just bought one.

I was reminded of this case while reading Dan Ariely’s excellent Predictably Irrational. His example of ordering beer demonstrates the phenomenon at work. It turns out that when ordering out loud people in a group opt for more variety, not less. Ariely suggests that this is because people need to choose something different to show they have a mind of their own, that their order conveys individuality, or perhaps that they are trying to impress.

This might mean that people order beer they don’t actually want to drink. Irrational maybe, but experimentally validated.

The really interesting part is that when people are allowed to order in private, by writing down their order, they order what they want.

Understanding this, from an influence viewpoint, is important:

1. People are influenced by others, but that influence may cause a decision contrary to the choices made by others;
2. People may make better (or at least more truthful) decisions by being protected from the influence of others and making their decisions in private.

This is very pertinent today of all days, as the US goes to the polls. The well-documented Bradley effect is an example of how some people will state their voting intentions in public, but vote differently when in the privacy of the polling booth. Will people who said they'll vote for Obama really vote for him?

We’ll see shortly in which direction the US public has truly been influenced.

The influence of online product reviewers

Rubicon Consulting has written a white paper based on research conducted on US-based web users. Rubicon is run by Nilofer Merchant, with whom I worked in compiling case studies for the book.

There are some important points to pull out from the study. It finds that those people that regularly post reviews and comments are not your average customer, but enthusiasts (or enthusiastic detractors). Some firms may decide that these folk exist at the extreme ends of the customer spectrum, are not typical of general customer, and can therefore be ignored.

This is a mistake: although average customers don’t post reviews they do read them. Importantly, product reviews drive product purchases, so ignoring the review posters is dangerous. As the paper concludes:

“The most frequent contributors are the influencers, and they have a strong influence on purchase decisions because they write most of the online recommendations and reviews.”

This means that firms can’t ignore frequent contributors, but they have to talk to them in a different way to ‘normal’ customers. This is music to my ears, echoing Influencer50’s own mantra of “Don’t pitch to influencers.”

Other findings I picked out include:

• Approaches that work well in one type of community may fail utterly in another. Confirmation of the ‘horses for courses’ guide to influence ecosystems.
• Confirmation of the 90-9-1 rule: 90% of users are lurkers, 9% of users contribute from time to time, and 1% of users participate a lot and account for most contributions.
• Influence of product reviews varies by category. You’re more likely to use an online review to buy a digital camera than you are to choose a doctor. (I’m relieved to hear this!)
• Online discussion is theatre: “Web discussion is a performance in which a small group of people interact with each other, and with companies, for the benefit, education, and amusement of everyone else.” Understand this and it shapes your entire approach to online communities.

There is a ton of other information on web usage in the US, which makes interesting reading. For example, the research finds that web users are more likely to vote Democratic. That should be an interesting theory to check in the coming week…

Laura Ramos on B2B Marketing Trends

Laura Ramos runs Forrester's B2B Marketing programme. I follow her research closely as, although it's US-centric, it produces some fascinating data on what B2B decision-makers do. Laura's latest comments focuses on B2B Marketing Trends. Pretty much consistent with what we see in the UK - the highlights are (with my notes):

• Commoditisation leading to a lack of differentiation, which leads to marketing all sounding the same (so true);
• B2B buyers buying like consumers. Using peer reviews and social media as decision making inputs (perhaps less true in the UK?);
• Ad avoidance and sales call avoidance - using web sources to delay contact with vendors (I think there is generic 'marketing avoidance' going on);
• Globalisation. Uh huh.

Laura suggests that the outcome of these trends will be the death of B2B Marketing. I agree, at least insofar as B2B marketing can't exist in the way it does. The justification that marketing "creates demand" is slammed by Laura as a cop-out. It needs to be more measurable in sales terms and more aligned with sales.

I'm looking forward to Part 2 of Laura's comments...

An interview with Nick Hayes

Nick, the president and founder of Influencer50, appeared on Webmaster radio last week, covering the basics of Influencer Marketing. It's actually an easy listen, and you can stream the interview podcast here. Or download the mp3 here if you want to miss the commercials!

Welcome Barbara French

A belated welcome is due to Barbara French, who joined Influencer50's San Francisco office in August. Barbara is well-known in Analyst Relations circles through her Tekrati service and blog. She's already contributing a ton of brain power to our US operation, and is sharing this publicly via her new blog, Sway.

Please welcome Barbara to the fold, and check out her blog for new insights into the world of influence.

How to engage with influencers

This advice is an older post, but it still bears up as a good template for engaging with influencers.

It is not specific to word of mouth marketing...

Don’t forget the most obvious influencers

At the risk of stating the bleeding obvious, the most important influencer on your customers is:
You.

Two particular dimensions are important:

Your product. If your product sucks no amount of influencer outreach is going to fix it. Start there, then consider influencers.

Your sales force. 85% of purchase decisions are impacted by the relationship between your sales force and the customer, according to the CMO Council*. In fact, it’s probably 100% (if you think about it) but remember that the impact may be positive or negative. Get the relationship wrong and no third party influencer has the power to retrieve the situation.




*Closing the Gap: The Sales & Marketing Alignment Imperative Executive Summary. Summary report available free.

Online influence – here comes Google

Via John Bell, I stumbled across an interesting post by Heather Green at Business Week on Google’s imminent method for ranking influencers. I shudder at the impact this will have on discussion of influence. We’ll end up comparing influencers based on the number of times they appear on a search result or, worse, whether they appear in the first ten returned results.

As John notes, influence is complex and context-specific. The specifics of influence are such that one might be a world expert in a given subject (Scotch whisky, web site development) but have very little authority in an adjacent area (cognac, web site design).

A feature (flaw?) in measuring influence is that you can only measure what you can measure. Google can only measure what it is aware of, which is the frequency and connectivity of web pages. It cannot determine (as far as I know) the impact that reading a particular page has on the subsequent actions of that reader. Did the reader make a purchase decision based on the content of the page, or rush off to sell their stock in RBS? Who knows.

Connectivity – the number of connections an individual has – is a poor proxy for influence. Why? It’s too easy to fake. We all know the people that have 500+ connections on LinkedIn, yet have very limited influence. Likewise with MySpace. The term for people with lots of connections but no influence is Bore.

The longer term, and greater, threat from Google is that influencers are considered a route to market for advertisers. We’ve already seen this sort of thing emerging from Buzzlogic – Google will be able to do this magnified a zillion times.

If Google’s plans get more firms to talk about influence, then fine. But I fear that it will dumb influence down to a few ‘magic’ numbers that have tenuous relevance to real influence.

In the presence of a super-influencer

I wrote a few weeks back about how to use super-influencers, those rare folk that have true influence over market shape and direction at a macro level. I suggested that you should use them (if you have the opportunity) to attract other, perhaps more focused or local influencers, thus assisting in the overall engagement of the influencer community. If influencers help to attract customers, then super-influencers help to attract influencers.

So it was my pleasure last week to host, for Microsoft, an influencer-only event featuring Steve Ballmer. The audience of influencers was clearly captivated by Steve’s open and candid style of presenting, as well as his ability to field questions on a wide range of subjects.

But most influencers were just keen to be in the same room as the main guy at Microsoft. Just this fact alone gives them something to talk about to their networks, and thereby reinforces their own influence.

I expect some of the influencers (they’re from the small business community) will blog separately about their morning with Steve – I’ll link to the interesting ones as they appear, but here's a taster from Emma Jones.